Stubbornly high mortgage rates further eroded home builders’ confidence in the new home market in October. Not only did the National Association of Home Builders (NAHB) report that the NAHB/Wells Fargo Housing Market Index (HMI) dropped 4 points this month , but the index for September was revised down an additional point. After its third consecutive monthly retreat, the HMI is now at 40, the lowest point since January 2023. Robert Dietz, NAHB’s chief economist said builders are encountering dual issues. Buyers, particularly younger ones, are being priced out of the market by interest rates that have remained above 7 percent for two months. Additionally, elevated rates are also increasing the cost and decreasing the availability of builder development and construction loans, which harms supply and contributes to lower housing affordability. Derived from a monthly survey that NAHB has been conducting for more than 35 years, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. All three major HMI indices posted declines in October. The HMI index gauging current sales conditions fell 4 points to 46, the component charting sales expectations in the next six months dropped 5 points to 44 and the gauge measuring traffic of prospective buyers dipped 4 points to 26.
Related Articles
Builder Confidence in Mild Uptick
April 18, 2023
Mark Paul Cervantes
Weely Real Estate News
Comments Off on Builder Confidence in Mild Uptick
“Currently, one-third of housing inventory is new construction, compared to historical norms of a little more than 10%,” added NAHB Chief Economist Robert Dietz. The post Builder Confidence in Mild Uptick appeared first on Weekly […]
Builder Confidence Mixed in Market for New Multifamily Housing
November 17, 2023
Mariel Alumit
Builders, Commercial Real Estate, Multi family, Top News, Weely Real Estate News
Comments Off on Builder Confidence Mixed in Market for New Multifamily Housing
Builder confidence in the market for new multifamily housing was mixed during the third quarter, according to results from the Multifamily Market Survey (MMS) released by the National Association of Home Builders (NAHB). The MMS […]
Builder Confidence Down for Fourth Consecutive Month
November 16, 2023
Mariel Alumit
Weely Real Estate News
Comments Off on Builder Confidence Down for Fourth Consecutive Month
Builder confidence in the market for newly built single-family homes fell six points to 34 this month, according to the National Association of Home Builders (NAHB)/Wells Fargo (NYSE:WFC) Housing Market Index (HMI). This marks the […]